What is Finance?

inance, the process of managing money and funds, is basically the administration of cash and other monetary instruments. It’s a whole domain related to organization, generation and origination of cash and bundles of other tools related to capital and revenue creating equipments.

It involves two basic elements; development and measurement. The former is regarded as an art but the later is treated as science. Although, this field is really complex and involves a lot of technical aspects in it, still it’s used for hedging risks and handling returns in order to get best out of your investment.

Our whole economy is regulated through financial systems and organizations, responsible for the application of true finance and its practices for magnifying profits and ultimate welfare of the economy. The financial systems mostly regulate funds in the economy. Their vital job is to get capital from institutional and individual investors and then mobilize them to businesses in need of capital. Through this transformation of funds, they not only assist industries but also earn income by charging interests and consequently boom our economy.

Finance is actually an area of economics that is related to allocation of funds and resources along with managing of acquisition, investment and attainment of assets through that finance. It deals with both money and capital markets; either short term and or long term, it inculcates all the issues regarding money.

Besides, the variety of other tools, Finance incorporates two significant elements; debt and equity. Debt is regarded as borrowing of funds while equity is related to your own personal funds. Furthermore, finance plays its role in raising or magnifying your wealth through trade of debt and equity.